Capecitabine is an oral prodrug of 5-fluorouracil. It is being increasingly used in the treatment of colorectal cancer in both the adjuvant and metastatic settings. This review aims to explore the data in relation to the pharmacology and mode of action of capecitabine, followed by an in-depth review of the available clinical evidence for the use of capecitabine as a single agent, or in combination therapy, in the treatment of colorectal cancer. The pharmacoeconomic and medical resource use implications are also investigated. The future role of capecitabine in the treatment of colorectal cancer and the questions that remain to be answered with regard to its optimal use are considered.